ABSTRACT
Binding prenuptial agreements (or pre-marriage contracts) are a well-known aspect of family law systems in many countries, including many civil law countries, several US states3 and Canadian provinces4 and New Zealand.5 Until recently, the Australian position, like the British position,6 has differed markedly from these jurisdictions. The existence of a prenuptial agreement was viewed as relevant but not decisive to how the family court (and now also the Federal Magistrates Service)7
would exercise its broad discretion under the Family Law Act (FLA) 1975 (Cth) to alter interests in property on separation and divorce.8 Binding financial agreements
1 This article in its original form first appeared in (2002) 16 International Journal of Law, Policy and the Family pp 127-40, and is reproduced with the kind permission of OUP. Since this article was first published, the Federal Attorney General has introduced the Family Law Amendment Bill 2003 into Parliament, which proposes a number of amendments to the Family Law Act 1975 (Cth), including some provisions relating to ‘financial agreements’ (prenuptial agreements being a species of these). In particular, in response to concerns of the legal profession (as discussed in this chapter), the Bill limits the extent and nature of the advice that independent legal advisers are required to give to clients before entering a financial agreement. The Bill replaces current provisions requiring the legal adviser to advise on whether the agreement is to the financial advantage or disadvantage of the client, prudent, and fair and reasonable, with the requirement that the legal adviser must advise on ‘the advantages and disadvantages, at the time the advice was provided, to the party making the agreement’. The explanatory memorandum makes clear that legal advice on the advantages and disadvantages is intended. The Bill also amends the legislation retrospectively so that a financial agreement will not exclude the court’s power to make a maintenance order if, at the time the agreement comes into effect (rather than the time it was made – the current position), a party is unable to support themself without relying on government income support. Finally, the Bill makes it clear that financial agreements are not subject to stamp duty tax. The Bill was passed by the House of Representatives on 13 August 2003 and was introduced into the Senate on 20 August 2003. The Bill and explanatory memorandum can be accessed via the Commonwealth Parliament’s home page: www.aph.gov.au/index.htm.
